MUMBAI: Debit cards have conclusively displaced credit cards as the primary mode of payment in the country following demonetisation. Until October last year, despite outnumbering credit cards by a factor of more than 25, debit cards accounted for only 42% of the total card spend. This has jumped to 60% after demonetisation, which was announced on November 8, 2016.
The change is largely driven by small public sector lenders like Oriental Bank of Commerce and Punjab & Sind Bank, where usage of cards has gone up nearly five times. Debit card transactions tripled—from October 2016 levels—in December. Transactions in January slipped to double those in October last year. However, according to payments companies, they are seeing stickiness in use of debit cards for utility and petrol bill payments and travel bookings.
Last October, public sector banks saw transactions worth Rs 10,893 crore from the 61.7 crore debit cards they had issued till then. As against this, private and foreign banks had reported transactions worth Rs 11,048 crore although their debit card base was much smaller at 12.25 crore. This has changed after demonetisation.
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